Canada Business Outlook Survey

Subdued sentiment amid sluggish sales expectations. As a measure of Canada’s overall business conditions, the Bank of Canada’s Business Outlook Survey Indicator fell in the second quarter of 2024, sitting below its historical average. Firms expected weaker sales over the next 12 months, with a particularly pessimistic outlook from businesses related to discretionary spending. The anticipation of continued moderation in consumer demand, coupled with elevated interest rates, led to softer inflation expectations among survey respondents. While the subpar business conditions suggest a possible easing in near-term GDP growth, the share of firms budgeting for a recession over the next 12 months decreased. This reflects businesses’ confidence in next year’s economy, likely linked to the beginning of the BoC’s policy easing cycle.